Network Orchestration: Managing the Scaling of Platform-based Ecosystems

Abstract

Multi-sided platform-based ecosystems have emerged as an important organizational arrangement and business model that sees the transformation of pipeline economies into network economies. How managers in these ecosystems approach scaling—as a means to grow their firms—is qualitatively different from what is prevalent in pipeline economies. This paper investigates how two platform companies in B2B markets scale their platform offering to users. We find that the type of platform, whether it is an innovation platform or transaction platform, involves different network effects. We show that innovation platforms need direct orchestration due to a lack of network effects, whereas transaction platforms follow a market logic which makes it easier to create network effects without direct interference by management.